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You can give out credit backed by BTC but it's impossible to give out more actual BTC than you hold, much like gold, unlike fiat.

• chii 9y ago
  and that credit won't be accepted by anyone who doesn't trust the creditor (bank in this case). so it's useless unless you only intend to spend the credit at certain locations that accept this credit cash, on the other hand, doesn't suffer from this predicament, since it's legally must be accepted. so Bitcoin lending via credits can't work, if at all.
  • sjeohp 9y ago
    The entire world banking system for hundreds of years was based on credit backed by gold, so it definitely can work. My only point was that this wouldn't equate to more btc in circulation, just more credit.
    • irln 9y ago
      > The entire world banking system for hundreds of years was based on credit backed by gold Just adding that the system above, rightly or wrongly was not sufficient for the expanding credit requirements of the world. > so it definitely can work. Depends upon what your definition of work :) > My only point was that this wouldn't equate to more btc in circulation, just more credit. Exactly. And be subject to the problems with bank runs because of the inelastic nature of gold.